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Property prices fall in Málaga but not in Estepona
Village of Estepona in Malaga, Spain
The Covid crisis came at a time when a growing number of projects were responding to strong demand for new properties on the Costa del Sol. With much of the economic activity in the region forcibly restricted, prices of real estate in and around Málaga are feeling the pressure of slowing interest and a growing stock of unsold properties—but not so in Estepona.
According to a recent study, it is pretty much a nationwide trend, with prices falling an average of 8% in Spain over 2020 and rental rates dropping by almost 18,5%. In Málaga city, the figures were even a little more pronounced, with sales prices falling by around 12,5% and rental prices by over 13%. These downward movements reflect a current glut of supply over demand, as the Covid situation has all but halted purchasing decisions on the part of the mostly Spanish buyers in the regional capital.
Many are holding on to see what will happen next, and putting off decisions to buy, upgrade or move until there is more certainty and a revival of economic activity. Parts of the Costa del Sol, such as Benalmádena, Torremolinos and Fuengirola, also suffered from a sudden surge in supply relative to demand as new projects came online just when interest faded due to the Corona crisis. This is particularly true of two and three-bedroom apartments and townhouses in the broader segments of the market.
Estepona bucks the trend
There are, however, sections of the market that buck the trend, such as the luxury market, which has shown itself to be remarkably resistant, with prices for quality properties in the most desirable parts of Marbella, La Cala de Mijas, Benahavis, Ojén and Estepona barely dropping or indeed rising. In Estepona, for instance, property prices actually rose by over 4% in a market that saw a large increase in new stock, but this trend is partly explained by the fact that many of the new properties being built in the area are increasingly upmarket, and therefore are bringing the average price up.
Marbella, too, saw a slight increase in prices, driven up on average by the continued popularity of newly built modern villas, apartments and semi-detached homes, where the prices of older properties have begun to drop a little. There is, of course, a difference between asking and sales price, and here especially existing homes have to be price-competitive if they want to appeal to buyers that are so far still very much focused on newly built and renovated property for sale in Marbella and surroundings.
By Adam Neale | Property News | February 22nd, 2021
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